#Liquidity101 Here is a short guide #Liquidity101 — what is liquidity in cryptocurrencies:

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💧 1. What is liquidity?

🔹 It is the ability of an asset to be quickly bought/sold without significantly affecting its price.

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⚖️ 2. High vs. Low liquidity

🔹 High liquidity — easy to trade, small spreads (e.g., BTC, ETH)

🔹 Low liquidity — hard to find a buyer/seller, price “jumps”

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💱 3. Where does liquidity impact?

• On exchanges — speed and stability of transactions

• In DeFi — efficiency of DEX pools

• During large buy/sell — less “slippage” in price

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🧑‍🌾 4. What is an LP (Liquidity Provider)?

🔹 A user who provides their tokens to a pool and earns from fees (on DEX, like Uniswap, PancakeSwap)

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📌 Tip: Before trading, check the liquidity of the token — otherwise, you might “get stuck” or lose on the spread.